Mori Building, LVMH and Others to Invest 83 Billion Yen in Ginza

April 2 (Bloomberg) -- Mori Building Co., Japan’s biggest
closely held developer by sales, and LVMH Moet Hennessy Louis
Vuitton SA, the world’s largest luxury-goods maker, are part of
a group that will develop a retail and office complex in Tokyo
as they anticipate increasing consumer spending.

The two companies along with Sumitomo Corp. and J. Front
Retailing Co. will spend 83 billion yen ($799 million) on a 13-story building with six underground levels in Ginza, said Shingo
Tsuji, president of Mori Building, at a press conference today
in Tokyo. Construction of the commercial facility, with about
147,600 square meters (1.6 million square feet) of floor area,
will start this month and be completed by November 2016, the
companies said in a statement.

Japanese developers are starting projects ahead of the 2020
Olympic Games as expectations of higher consumer spending and
stronger demand for office space push up land prices in major
cities. The price of land in the Ginza shopping district, where
Japan’s most expensive commercial property is found, rose 9.6
percent in 2013 to 29.6 million yen per square meter, according
to the land ministry.

“With the Olympic Games coming up, we must accelerate
project development,” Mori Building’s Tsuji said, adding that
the proportion of investment by the four companies hasn’t been
finalized.

The recovery in land prices has attracted Paris-based LVMH
to invest in the project, Yves Carcelle, a member of the LVMH
Executive Committee, said at the press conference.

Ginza is “one of the key locations in the world,”
Carcelle said. “The group acquired part of the building, which
means not only commercial commitment, but really a financial
commitment to the project.”